In an Accrual Adjustment for Expenses Incurred but Not Yet

question 173

Multiple Choice

In an accrual adjustment for expenses incurred but not yet paid:

• A)a liability is decreasing since cash is being paid for an expense incurred at the time of the adjustment.
• B)the liability recorded when cash was received is increasing as the expense is incurred.
• C)the liability recorded when cash was received is decreasing as the expense is incurred.
• D)a liability is increasing since cash will be paid in the future due to the expense incurred.

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Definitions:

Treasury Stock

Shares of a company's own stock that it has reacquired but not yet retired or resold.

Paid-in Capital

The amount of money that a company has received from shareholders in exchange for shares of stock, reflecting the investment in the business.

Dividends Payable

A liability account that represents the amount of dividends that a company has declared but not yet paid out to its shareholders.

Treasury Stock

Represents a company's own shares that have been reacquired and held in the company's treasury.